Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report

Table of Contents

1. Governance 1 a. Board/Directors 1 b. Company Secretaries’ Qualifications and Experience 3 c. Officers Who Were Previously Partners of the Audit Firm 3 d. Directors’ Meetings 4 e. Interest in Capital 5

2. Operations 5 a. Principal Activities 5 b. Review and Results of Operations 5 c. Distributions 5 d. Significant Changes in State of Affairs 6 e. Events Subsequent to Balance Date 6 f. Likely Developments 6 g. Environmental Regulation 6

3. Remuneration Report 7 a. Snapshot of Changes 9 b. Actual Executive Remuneration Outcomes – Audited 11 c. About this Report – Audited 12 d. Our Governance Policy 13 e. Reward Strategy and Practice – Audited 13 f. How Rewards are Influenced by Performance – Audited 21 g. Executive Contracts – Audited 24 h. Statutory Executive Remuneration Disclosures – Audited 26 i. Non-Executive Director Remuneration – Audited 33

4. Other 35 a. Security Options 35 b. Indemnification and Insurance of Directors and Officers 35 c. Non Audit Services 35 d. Rounding Off 36

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 37

Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report

The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being Lend Lease Corporation Limited (‘the Company’) and its controlled entities including Lend Lease Trust (‘LLT’) (together referred to as the ‘Consolidated Entity’ or the ‘Group’), for the financial year ended 30 June 2011 and the Auditors’ Report thereon. Following shareholder approval on 12 November 2009, the shares of the Company and the units in LLT were combined as stapled securities. From 13 November 2009, the shares in the Company and the units in LLT have been traded as one security under the name of Lend Lease Group on the Australian Securities Exchange (‘ASX’). 1. Governance a. Board/Directors The names, qualifications and experience of each person holding the position of Director of the Company at the date of this Report are: D A Crawford AO, Chairman (Independent Non Executive Director) Age 67 Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003. Mr Crawford was appointed an Officer of the Order of Australia (AO) in June 2009 in recognition for service in various fields including to business as a Director of public companies, to sport particularly through the review and restructure of national sporting bodies, and to the community through contributions to arts and educational organisations. Experience and Qualifications Previously, Mr Crawford was National Chairman of the Australian firm of KPMG. He has extensive accounting and business experience having worked with many large corporations and governments. He holds a Bachelor of Commerce and Bachelor of Laws from the University of Melbourne. He is a Fellow of the Institute of Chartered Accountants. Other Directorships and Positions Mr Crawford is Non Executive Chairman of Foster’s Group Limited (appointed Director August 2001 and Chairman October 2007) and a Non Executive Director of BHP Billiton Limited (appointed May 1994). He was formerly a Non Executive Director of Westpac Banking Corporation (appointed May 2002, resigned December 2007) and National Foods Limited (appointed November 2001, resigned June 2005). S B McCann, Group Chief Executive Officer and Managing Director (Executive Director) Age 46 Mr McCann was appointed Group Chief Executive Officer and Managing Director in December 2008 and joined the Board in March 2009. Experience and Qualifications Mr McCann joined Lend Lease in 2005. Prior to his current role, Mr McCann was Group Finance Director, appointed in March 2007 and Chief Executive Officer for Lend Lease’s Investment Management business from September 2005 to December 2007. Mr McCann has more than 15 years experience in funds management and capital markets transactions. Prior to joining Lend Lease, Mr McCann spent six years at ABN AMRO, where his roles included Head of Property, Head of Industrial Mergers & Acquisitions and for the last three years, Head of Equity Capital Markets for Australia and New Zealand. Previous roles also include Head of Property at Bankers’ Trust, four years as a mergers and acquisitions lawyer at Freehills, Melbourne and four years in taxation accounting. Mr McCann holds a Bachelor of Economics (Finance major) and a Bachelor of Laws from Monash University in Melbourne, Australia. Other Directorships and Positions Nil.

1 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

1. Governance continued a. Board/Directors continued P M Colebatch (Independent Non Executive Director) Age 66 Mr Colebatch joined the Board in December 2005 and is Chairman of the Personnel and Organisation Committee and a member of the Risk Management and Audit Committee. Experience and Qualifications Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the Executive Board of Swiss Reinsurance Company, Zurich. He was previously on the Executive Board of Credit Suisse Group, Zurich, where he was Chief Financial Officer, and was subsequently Chief Executive Officer of Credit Suisse Asset Management. Other Directorships and Positions Mr Colebatch is a Non Executive Director of Insurance Australia Group Limited (appointed January 2007), a Non Executive Director of Man Group plc (appointed September 2007) and is on the Board of Trustees for the Prince of Liechtenstein Foundation and the LGT Group Foundation (appointed September 2009). G G Edington CBE (Independent Non Executive Director) Age 65 Mr Edington joined the Board in 1999 and is a member of the Risk Management and Audit Committee and the Sustainability Committee. Experience and Qualifications Qualified as a Chartered Surveyor, Mr Edington brings to the Board extensive UK and international experience in the property sector. Mr Edington was a Director of BAA plc and Chairman of BAA International. He joined BAA plc in 1988, became a member of the Board in 1991 and has been the Chairman of six BAA companies. He is a past President of the British Property Federation, was the Chairman of UK property company Greycoat Estates Limited and was a member of the Bank of England Property Forum. Mr Edington was formerly Chairman of the Council of Trustees of the UK children’s charity, Action for Children, and was awarded a CBE for services to children. Other Directorships and Positions Mr Edington is on the Board of Trustees for the Fulham Palace Trust, based in the UK (appointed May 2011). P C Goldmark (Independent Non Executive Director) Age 70 Mr Goldmark joined the Board in 1999 and is Chairman of the Nomination Committee and a member of the Sustainability Committee. Experience and Qualifications Until his retirement in December 2010, Mr Goldmark was Director, Climate and Air Program at Environmental Defense, a US based non-profit environmental advocacy organisation. He was the Chairman and Chief Executive Officer of The International Herald Tribune in Paris between 1998 and 2003. Prior to this, he was the President and Chief Executive Officer of the Rockefeller Foundation in New York for 10 years. Mr Goldmark has held positions including Senior Vice President of the Times-Mirror Corporation, Executive Director of the Port Authority of New York and New Jersey, and Director of the Budget for the State of New York. He now works as an independent consultant and columnist and is a writer and speaker on world affairs. Mr Goldmark graduated with a BA from Harvard College, Government Department, magna cum laude. He brings to Lend Lease his wide experience as a Chief Executive Officer and senior executive in the private and public sectors, both in the USA and internationally. Other Directorships and Positions Mr Goldmark is on the Board of Solar Outdoor Lighting in the US (appointed January 2011).

2 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

1. Governance continued a. Board/Directors continued J A Hill (Independent Non Executive Director) Age 65 Ms Hill joined the Board in May 2006. She is Chairperson of the Sustainability Committee and a member of the Personnel and Organisation Committee. Experience and Qualifications Ms Hill has held a number of senior executive positions in the land development and housing construction industry in North America. She was formerly the Chairperson, President and Chief Executive Officer of Costain Homes, Inc. (US) and Vice President and General Manager, Mobil Land (Georgia) Corporation. She has a Bachelor of Arts from the University of California in Los Angeles and a Master of Arts in marketing and management from the University of Georgia. Other Directorships and Positions Ms Hill is a Non Executive Director of Wellpoint, Inc. (appointed March 1994). She was formerly a Non Executive Director of Resources Connection, Inc. (appointed January 2003, resigned December 2006) and Holcim (US) Inc (appointed February 2004, resigned January 2007). Ms Hill also sits on the Board of Directors of the Lord Abbett family of mutual funds, which is the trustee of 31 mutual funds of publicly held companies. D J Ryan AO (Independent Non Executive Director) Age 59 Mr Ryan joined the Board in December 2004. He is Chairman of the Risk Management and Audit Committee and a member of the Personnel and Organisation Committee. Experience and Qualifications Mr Ryan has a background in commercial banking, investment banking and operational business management. He has previously held senior executive management positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies. He has a Bachelor of Business from the University of Technology in Sydney, Australia, and is a Fellow of the Australian Institute of Company Directors and CPA Australia. Other Directorships and Positions Mr Ryan is the Non Executive Chairman of Tooth & Co Limited (appointed Director September 1999 and Chairman January 2003) and ABC Learning Centres Limited (administrators appointed, receivers and managers appointed) (appointed Director June 2003 and Chairman 30 May 2008). He was formerly the Non Executive Chairman Transurban Holdings Limited (appointed Director April 2003, Chairman February 2007 and retired August 2010).

Former Directors Mr M W Selway retired on 10 February 2010, having joined the Board on 17 June 2008. b. Company Secretaries’ Qualifications and Experience W Hara Mr Hara was appointed Company Secretary in July 2007. Prior to his appointment as Group General Counsel and Company Secretary of Lend Lease in January 2007, Mr Hara was company secretary for another company listed on the ASX. Mr Hara has a Bachelor of Commerce and a Bachelor of Laws from the University of New South Wales and is a member of the Law Society of New South Wales. W Lee Ms Lee was appointed Assistant Company Secretary in January 2010. Prior to her appointment, Ms Lee was a company secretary for several subsidiaries of a publicly listed financial institution. Ms Lee has a Bachelor of Arts and a Bachelor of Laws from the University of Sydney, and is an Associate of Chartered Secretaries Australia. c. Officers Who Were Previously Partners of the Audit Firm Mr Crawford was a Partner and Australian National Chair of KPMG. He resigned from this position on 28 June 2001 prior to his appointment as a Director of the Company on 19 July 2001. KPMG or its predecessors was appointed as the Company’s auditor at its first Annual General Meeting in 1958.

3 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

1. Governance continued d. Directors’ Meetings During the financial year, twelve Board meetings were held. The Board recognises the essential role of Committees in guiding the Company on specific issues. Committees address important corporate issues, calling on senior management and external advisers prior to making a final decision or making a recommendation to the full Board. There are four permanent Committees of the Board. Nomination Committee The Nomination Committee consists entirely of Non Executive Directors. The Committee assists the Board by considering nominations to the Board to ensure that there is an appropriate mix of expertise, skills and experience on the Board. During the financial year 1 July 2010 to 30 June 2011, all seven meetings of the Nomination Committee were held in conjunction with Board meetings and all Non Executive Directors routinely attend. Risk Management and Audit Committee The Risk Management and Audit Committee consists entirely of Non Executive Directors. The principal purpose of the Committee is to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to the Group’s risk management and internal control systems, accounting policies and practices, internal and external audit functions and financial reporting. During the financial year 1 July 2010 to 30 June 2011, four meetings of the Risk Management and Audit Committee were held. Personnel and Organisation Committee The Personnel and Organisation Committee consists entirely of Non Executive Directors. The Committee’s agenda reflects the importance of human capital to the Group’s strategic and business planning and it assists the Board in establishing appropriate policies for people management and remuneration across the Group. During the financial year 1 July 2010 to 30 June 2011, seven meetings of the Personnel and Organisation Committee were held. Sustainability Committee The Sustainability Committee consists entirely of Non Executive Directors. The Committee assists the Board in monitoring the decisions and actions of management in achieving Lend Lease’s aspiration to be a sustainable organisation. During the financial year 1 July 2010 to 30 June 2011, four meetings of the Sustainability Committee were held. Attendance at Meetings of Directors 1 July 2010 to 30 June 2011 Risk Management and Audit Personnel and Organisation Sustainability Committee Board Meetings1 Committee Meetings Committee Meetings Meetings Director Held2 Attended Held2 Attended Held2 Attended Held2 Attended D Crawford 12 12 P Colebatch 12 12 4 4 7 7 G Edington 12 12 4 4 4 4 P Goldmark 12 11 4 4 J Hill 12 10 7 7 4 4 S McCann 12 12 D Ryan 12 12 4 4 7 7 1 Three of the 12 meetings were out of schedule board teleconferences constituted to address specific issues. J Hill was unable to attend two of these teleconferences, both of which were called at short notice. 2 Reflects the number of meetings held during the time the Director held office during the year.

In addition, matters were dealt with as required by circular resolution.

4 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

1. Governance continued e. Interest in Capital The interest of each of the Directors (in office at the date of this report) in the issued securities of the Company at 26 August 2011 and 17 August 2010 is set out below. Securities Securities held Securities Securities held held beneficially/ held beneficially/ directly indirectly Total directly indirectly Total Director 2011 20111 2011 2010 20101 2010

D Crawford 73,723 73,723 73,593 73,593 P Colebatch 5,023 13,300 18,323 5,023 13,300 18,323 G Edington 19,643 20,425 40,068 19,643 20,425 40,068 P Goldmark 3,000 21,794 24,794 3,000 21,794 24,794 J Hill 2,000 12,324 14,324 2,000 12,324 14,324 D Ryan 31,273 31,273 31,273 31,273 S McCann 83,269 61,367 144,636 181,339 4,470 185,809 1 Includes securities in the Retirement Plan beneficially held by Non Executive Directors.

2. Operations a. Principal Activities From 1 July 2010, the Group moved to a regional management structure focused on four major geographic regions: Australia, Asia, Europe and the Americas, to better support the Group’s integrated model. The regional business units operate across four lines of business, as follows:  The Development business operates in all four major geographic regions and is involved in the development of master- planned urban communities, inner-city mixed-use developments, apartments, retail and the Retirement Living and Aged Care sector;  The Construction business operates in all four major geographic regions providing project management, engineering and construction services;  The Investment Management business operates in all four major geographic regions and provides real estate investment management, retail property management and asset management services. This business includes the Group’s ownership interests in property investments held directly or indirectly through investments in the Group managed funds; and  The Infrastructure Development business operates in Australia, Europe and the Americas and manages and invests in Public Private Partnerships (PPP) projects. b. Review and Results of Operations A full review of operations is included in the Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of the Annual Consolidated Financial Report. c. Distributions The 2010 final distribution of A$67.9 million (12 cents per security, 100% franked) referred to in the Directors’ Report dated 16 August 2010 was paid on 24 September 2010. Details of distributions in respect of the current year are as follows: A$m Interim distribution of 20 cents per security (50% franked) paid on 30 March 2011 113.1 Final distribution of 15 cents per security (nil% franked) declared by Directors to be paid on 30 September 2011 85.6 Total distributions declared 198.7

5 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

2. Operations continued d. Significant Changes in State of Affairs On 21 December 2010, the Group entered into an agreement with Bilfinger Berger SE to acquire 100% of Valemus, the parent company of Abigroup, Baulderstone and Conneq, which together now form the Group’s infrastructure business in Australia. The businesses are leading providers of services in the engineering, engineering services and construction markets in Australia. The acquisition has increased the Group’s capabilities and activities in the engineering and construction market and diversified its position in this sector. The acquisition was completed on 10 March 2011. Other than the acquisition of Valemus, there have been no significant changes in the Group’s state of affairs. e. Events Subsequent to Balance Date No matters or circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the Group, the results of those operations or state of affairs of the Group in subsequent financial years. f. Likely Developments Details of likely developments in the Group’s operations in subsequent financial years are contained in the reports from the Chairman and Managing Director in the Annual Report. In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to the Group. g. Environmental Regulation The Lend Lease Group is subject to various state and federal environmental regulations in Australia. The Directors are not aware of any material non compliance with environmental regulations pertaining to the operations or activities during the period covered by this Report. In addition, the Lend Lease Group is registered and publicly reports the annual performance of its Australian operations under the requirements of the National Greenhouse and Energy Reporting (NGER) Act 2007 and Energy Efficiency Opportunities (EEO) Act 2006. All Lend Lease businesses continue to operate an integrated Environment, Health and Safety Management System ensuring that non compliance risks and opportunities for environmental improvement are identified, managed and reported accordingly.

6 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report

Message from the Board

Dear Securityholder, In 2010, the Board completed an extensive review of Lend Lease’s Executive Reward Strategy. The objective of the Executive Reward Strategy is to enable the Group to attract, retain and motivate exceptional people, and to create value for our securityholders. The delivery of reward components over periods of up to four years encourages sustainable long term performance. During the year ended 30 June 2011 the Group finalised implementation of the Executive Reward Strategy by implementing the following actions that were described in the 2010 Remuneration Report: − a review of fixed remuneration to ensure market competitiveness. This follows two years of fixed remuneration freezes for executives (except for those who assumed different roles with greater responsibilities) − a more robust Short Term Incentive (STI) program which provides a direct link between reward, profit generation and securityholder value creation − re-weighting of the remuneration mix to focus on the elements where executives have the greatest influence while maintaining an appropriate balance between short and long term focus − greater levels of deferral for our executives (50% of Short Term Incentives) over one and two years, delivered as securities, to align executives’ interests to those of our securityholders and reduce the risks associated with paying STI in cash immediately − assessing Long Term Incentives (LTI) against a single performance hurdle which measures return to securityholders compared to the performance of the companies in the S&P ASX100 Index. During the year we also expanded our business through the acquisition of Valemus Australia (Valemus), the parent company of Abigroup, Baulderstone and Conneq, which together now form the Group’s infrastructure business in Australia. Valemus employees will move to our Lend Lease reward strategy as soon as possible. We will ensure that our Executive Reward Strategy continues to align to our business strategy and supports further sustainable growth. We will continue to listen to you and consider refinements to our reward strategy. We have made a number of changes to this year’s Remuneration Report to improve its presentation and readability. We continue to welcome your feedback on how we can further improve the Remuneration Report for the future.

David Crawford, AO Phillip Colebatch Chairman Chairman, Personnel and Organisation Committee

7 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued

To assist readers, key terms and abbreviations used in the remuneration report are set out below.

Term Definition

Earnings per Security Profit/(loss) after tax divided by the weighted average number of ordinary securities (excluding (EPS) treasury securities). For some earlier LTI allocations the definition of profit/(loss) after tax may have specific inclusions or exclusions.

Executive Reward A framework and policy that governs how the most senior employees in the organisation are Strategy (ERS) remunerated.

Fixed remuneration Annual remuneration paid regularly with no performance conditions. May include benefits depending on the location of the individual and the specific requirements of each jurisdiction. Benefits may include a car, medical insurance, superannuation or retirement contributions, life insurance and disability insurance.

Good Leaver An employee who is ceasing employment for reasons such as retirement or redundancy and who may remain eligible for a part of an incentive opportunity.

Group Lend Lease Corporation Limited and all of its subsidiaries.

Key Management Those executives who have the authority and responsibility for planning, directing and controlling Personnel the activities of the Group directly or indirectly (as per Accounting Standard AASB 124 Related Party Disclosures).

Long Term Incentive An incentive scheme which grants benefits to participating executives that may vest, in whole or (LTI) part, should specified performance measures be met over a 3 or 4 year period.

Other Executives Those executives who are Key Management Personnel or are among the five highest paid executives of the Group or one of the five highest paid of the Company, excluding the Executive Director.

PAT Profit after tax.

Personnel & A Board sub-committee made up entirely of independent Non-Executive Directors which assists Organisation the Board fulfil its responsibilities in people management and reward polices. Committee

Region The organisational unit responsible for all operations within a geography (with the objective of providing integrated property related services).

Remuneration mix The relative weighting of each component of remuneration.

Short Term Incentive Incentives awarded to individuals with direct reference to the achievement of Group, regional and (STI) individual performance over one year.

Target performance A level of financial performance measured using profit after tax set by the Board.

Total Securityholder Measures the movement in a Company’s security price, dividend yield and any return of capital Return (TSR) over a specific period. It is often expressed in percentage terms.

8 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued a. Snapshot of Changes In 2011, Lend Lease implemented the changes described in the 2010 remuneration report. These changes are consistent with our Executive Reward Strategy, the objectives of which are set out below.

Lend Lease strategic vision

Our strategic vision is to be the leading international property and infrastructure company. We are committed to being Incident and Injury Free, creating and building innovative and sustainable solutions, forging partnerships and delivering strong investment returns. Our Executive Reward Strategy objectives will assist us to achieve our strategic vision

Executive Reward Strategy objectives

Creating an appropriate Partnering the interests of Encouraging a balanced Implementing sustainable remuneration level and mix securityholders and focus on short and long term remuneration programs for executives executives performance

Our guiding principles determine how we seek to achieve our reward objectives Clear governance practices A significant portion of Consider and, as to minimise potential remuneration is at risk but Simple, transparent and appropriate, respond to the conflicts of interest and can be earned through easy to communicate interests of internal and enable effective decision achieving outstanding external stakeholders making by the Board and performance management

Implementing reward objectives – enhancements made during 2011

Remuneration mix: Incentive opportunities and remuneration mix have been defined for each executive. The remuneration mix has been weighted towards elements where the executive has greatest influence whilst balancing short and long term focus. These changes support a strong link between pay, performance and returns to securityholders.

Fixed remuneration: Levels have been increased to maintain market competitive remuneration levels. Market benchmark groups have been refined to recognise comparable companies by size, complexity, scope, industry and location.

Short term incentives (STIs): Half of STI payments are to be delivered as securities and deferred for up to two years to create alignment with securityholders’ interests. Changes to STI pool funding provide a direct link to Lend Lease’s capacity to pay and value created for securityholders by linking the pool to profitability. Use of a balanced scorecard ensures performance is assessed holistically. An increase in STI opportunity to reward outstanding performance has been balanced by a high level of STI deferral and lower weighting to LTI.

Long term incentives (LTIs): Provided to a small number of key executives who have the most influence over securityholder value. LTI grants are tested against relative TSR to align reward to securityholder outcomes. Half of the grant is tested after three years and lapses if the performance hurdle is not achieved. The remaining half is tested after four years and lapses if the performance hurdle is not achieved. There is no re-testing.

9 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued a. Snapshot of Changes continued Impact of changes on the remuneration of the Group Chief Executive Officer and Managing Director (CEO)

The Board made the following changes to the remuneration of the CEO, consistent with the Executive Reward Strategy (ERS) and with consideration of market benchmarks provided by PricewaterhouseCoopers (PwC). − The CEO’s total target remuneration was increased by 2.9%. The increase to total target remuneration included an increase to fixed pay of 19.9% which was offset by a reduction in other elements of remuneration. The increase in fixed pay was to ensure that the CEO’s pay level is market competitive. The increase recognised that the CEO’s fixed pay was previously below that paid to CEO’s of comparable companies with similar levels of global complexity. The increase also recognised that there had been no adjustment to the CEO’s fixed pay since his appointment in December 2008. − A change in the CEO’s remuneration mix to reflect the objectives of the ERS which included: . an increase in the CEO’s maximum STI opportunity. The CEO can earn up to 150% of his target STI opportunity for outstanding performance. STI is paid 50% as cash and 50% as deferred securities; . the deferral of 50% of any STI award for up to two years, with the deferred amount paid as Lend Lease securities that are subject to continuing employment. The deferral period has increased to reinforce a longer-term outlook and further align remuneration outcomes with securityholder interests; and . a reduction in the CEO’s LTI opportunity balanced with the increased deferred STI opportunity. The LTI continues to be an integral part of the CEO’s remuneration to maintain long term focus. − A single performance hurdle for the CEO’s LTI so that the full LTI award is only paid where Lend Lease TSR is at or above the 75th percentile of the TSR of companies in the S&P ASX 100 Index. Half of the LTI award is paid if Lend Lease TSR is at the 50th percentile, with pro rata vesting where Lend Lease TSR is between the 50th and 75th percentile. There is no vesting if Lend Lease TSR is below the 50th percentile. The LTI award is split so that one half is measured over a period of three years and the other half over four years. There is no retesting, so if the performance hurdle is not met the LTI award lapses. − Following these changes the CEO’s total target remuneration has increased by 2.9%, however, in line with our objective of rewarding outstanding performance, the maximum remuneration of the CEO, if the Board awarded the maximum STI and if all LTI vested, was increased by 27.7%. The actual remuneration paid to the CEO during the year ending 30 June 2011 is set out in Section 3b.

10 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued b. Actual Executive Remuneration Outcomes - Audited Consistent with our intention to provide ongoing transparency and aligned with the recommendations of the Productivity Commission and the Corporations and Markets Advisory Committee, we have outlined below the actual amounts received during the year ended 30 June 2011 by the Executive Director and Other Executives. The table below also includes cash STI payments that relate to performance in the year ended 30 June 2011 which are due to be paid in September 2011. Please refer to Section h for the statutory remuneration tables which are prepared consistent with the Accounting Standards and Corporations Act. Deferred STI amounts from prior years that have vested during the year have been included (based on the security price at the relevant vesting date). As no LTI vested during the year, no value has been included. This table does not include any ‘at-risk’ awards that are still subject to performance or employment conditions. Retention, Amount Amount Fixed granted in prior Other forfeited during forfeited during $A000s Year remuneration1 Cash STI2 Deferred STI3 LTI years incentives4 Total5 the year STI6 the year LTI7 Executive Director Stephen McCann 2011 2,069 1,927 416 4,412 (770) 2010 1,726 1,368 122 965 4,181 (224) (438) Other Executives Scott Charlton 2011 1,303 780 2,083 (173) (Part year only) 2010 349 191 540 (68) Tarun Gupta 2011 812 462 84 250 1,608 (66) David Hutton 2011 865 384 147 60 1,456 (328) 2010 679 258 274 1,211 (133) (171) Daniel Labbad 2011 1,046 483 85 1,614 Rod Leaver 2011 1,220 481 146 1,847 (350) 2010 860 481 149 1,490 (111) Anthony Lombardo 2011 814 510 107 1,431 2010 659 320 59 93 1,131 (59) (93) Robert McNamara 2011 747 439 1,186 (97) Mark Menhinnitt 2011 876 456 105 1,437 (228) 2010 784 354 250 1,388 (244) (223) Eng-Peng Ooi 2011 591 304 68 963 (305) Brad Soller 2011 893 500 101 1,494 (200) 2010 736 414 73 116 1,339 (148) (115) 1 Fixed remuneration consists of salary, non-monetary benefits, superannuation and other long-term benefits, in line with statutory remuneration disclosure requirements. 2 Cash STI refers to 50% of the actual STI that was earned in the year ended 30 June 2011, which will be paid to the executive in cash in September 2011. 3 Deferred STI is the value of deferred securities granted on 1 September 2009 that vested on 1 September 2010. This value is based on the closing price on the vesting date (1 September 2010). Deferred STI also includes the value of any dividends received on deferred STI securities. The deferred portion of the STI relating to performance in the year ended 30 June 2011 is not included in this table as it has not yet vested. 4 Other incentives includes a performance based incentive for Tarun Gupta that vested during the year and a cash retention for David Hutton that recognised his contribution to the Barangaroo development project. 5 Total remuneration disclosed in this table is different from that disclosed in the statutory remuneration table in Section h as the statutory remuneration disclosure includes an amortised value for the STI deferred securities and a valuation of long term incentives that have not yet been paid and that are subject to meeting performance conditions and ongoing employment. 6 STI forfeited refers to the unearned component of each Executive’s maximum STI for the year ended 30 June 2011 and any STI that was earned in a prior year and forfeited during the year ended 30 June 2011. 7 LTI forfeited includes the value of LTI that lapsed during the year ended 30 June 2010 (for whatever reason e.g. termination or not meeting performance hurdles). The value has been determined based on the Lend Lease security price at the date of lapsing. No long term incentive awards were tested or vested during the year ended 30 June 2011. 11 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued c. About this Report – Audited This report forms part of the Directors’ Report and has been audited in accordance with the Corporations Act 2001. Who this report covers This report presents the remuneration arrangements for Lend Lease’s Key Management Personnel and five highest paid Company and Group executives.

Non Executive Directors David Crawford Chairman, Independent Non Executive Director Phillip Colebatch Independent Non Executive Director Gordon Edington Independent Non Executive Director Peter Goldmark Independent Non Executive Director Julie Hill Independent Non Executive Director David Ryan Independent Non Executive Director

Executive Director Stephen McCann Group Chief Executive Officer and Managing Director Other Executives Scott Charlton Group Director of Operations Tarun Gupta1 Group Head of Investment Management (appointed to this position on 1 July 2010) David Hutton1 Group Head Centres of Excellence (appointed to this position on 1 July 2010) Daniel Labbad Chief Executive Officer, Europe, Middle East and Africa (appointed to this position on 1 July 2010) Rod Leaver Chief Executive Officer, Asia (appointed to this position on 1 April 2011, previously Chief Executive Officer, Australia) Anthony Lombardo1 Group Head of Strategy and Mergers & Acquisitions Robert McNamara Chief Executive Officer, Americas (appointed to this position on 1 July 2010) Mark Menhinnitt Chief Executive Officer, Australia (appointed to this position on 1 April 2011, previously Group Head of Public-Private Partnerships) Eng-Peng Ooi Chief Executive Officer, Asia (appointed to this position on 1 July 2010. Ceased in this position on 31 March 2011) Brad Soller Group Chief Financial Officer Previously disclosed Executives2 Michael Bellaman Chief Executive Officer, Bovis Lend Lease Americas (resigned on 20 August 2010) Murray Coleman Managing Director Australia Project Management and Construction and Group Head of Environment, Health & Safety, Risk and Insurance (appointed to this position on 7 February 2011 previously Group Head of Project Management, Design and Construction Centre of Excellence) William Hara Group General Counsel and Company Secretary Neil Martin Director of Operations EMEA (appointed to this position on 1 January 2010); former Group Head of Health and Safety, Risk and Insurance 1 Included in this report as one of the five highest paid executives of the Company and the Group. 2 Previously disclosed executives are no longer required to be disclosed as they are neither Key Management Personnel nor in the top five highest paid Executives in the Group or Company during the year ended 30 June 2011.

12 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued d. Our Governance Policy The Board is ultimately responsible for determining executive remuneration at Lend Lease. It is assisted in this regard by the Personnel & Organisation (P&O) Committee. To support effective governance, the P&O Committee: − consists entirely of independent Non-Executive Directors; − has unrestricted access to senior management and company records; and − can obtain independent legal or other professional advice. In 2010, the Board appointed PwC to assist the P&O Committee in fulfilling its duties. PwC is engaged by the P&O Committee and provide advice and reports directly to the Committee. The P&O Committee’s charter is available on the Lend Lease website: www.lendlease.com. e. Reward Strategy and Practice – Audited Our Executive Reward Strategy provides Lend Lease with simple and transparent remuneration practices which have regard to the interests of both internal and external stakeholders (refer to table in Section a). In addition, to encourage strong performance, a significant portion of individual’s remuneration should be ‘at risk’, and underpinned by clear and balanced metrics. Remuneration mix For the year ended 30 June 2011, the Board set a target level of remuneration for each Executive having regard to market benchmarking completed by PwC. Target remuneration is made up of a mix of fixed remuneration, cash STI, deferred STI and LTI. The table below shows the target remuneration mix for the Group CEO and Other Executives. The remuneration mix and levels of remuneration are set so that on-target performance will deliver total rewards close to the market median, with total rewards above the median for superior performance. Deferred STI LTI Role Fixed remuneration Cash STI (1-2 years) (3-4 years) Group CEO and Percentage of Managing Director 30% - 35% 20% - 25% 20% - 25% 20% - 30% target Other Executives 40% - 45% 20% - 25% 20% - 25% 15% - 20% remuneration

The mix of executive reward is also designed to be aligned with the company’s long-term financial performance:

13 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued A target level of remuneration is set for each Executive having regard to market benchmarking reports that are provided by external advisers. PwC completed market benchmarking during the year ended 30 June 2011. The three elements of our executive remuneration – that is, fixed remuneration, short-term incentives and long-term incentives are described over the following pages. Fixed remuneration Fixed remuneration is a guaranteed annual salary. It may include benefits depending on the individual’s location and the specific requirements of each jurisdiction. Benefits might include a car, medical insurance, superannuation or retirement contributions, life insurance and disability insurance. International assignees may have additional benefits such as housing, schooling and tax return preparation. Fixed remuneration for the Group CEO and Managing Director is recommended by the P&O Committee and approved by the Board. The P&O Committee approves the fixed remuneration of Other Executives. Fixed remuneration is reviewed annually and changes take effect from 1 September each year, except in the case of a new appointment. Fixed remuneration is set toward the middle of the market of comparable roles in companies of a similar size and level of complexity to Lend Lease. 1. for Australian based Executives, in roles with an Australian focus, reference is made to companies listed on the ASX that are ranked between 26 and 75 by market capitalisation (excluding Companies domiciled overseas and property trusts where management is not typically employed by the trust); 2. for Executives in roles with global responsibilities, reference is made to a peer group of companies listed on the ASX that are ranked in the first 75 by market capitalisation and which have significant global operations. This reflects the complexity involved in running a company such as Lend Lease with a global footprint; and 3. relevant local comparator groups are used for Executives based in other countries. Short-Term Incentives (STI) STI is an ‘at risk’ component. At the start of the year executives are assigned a scorecard of measures which are aligned to the Group’s overall strategic objectives. The scorecard represents a balance of financial and non-financial measures (see examples on page 15). Executives’ performance against their individual scorecard objectives is assessed at the end of the financial year to determine their overall performance achievement. STI opportunity Target STI opportunities are set using the remuneration mix guidelines outlined above and are tested against the relevant market levels for each executive role. Executives receive notification of a target STI opportunity annually. Each executive’s actual STI award may be higher (capped at 150% of target) or lower than their target award and will be determined by considering the company’s financial performance and also the individual’s overall performance achievement. Executives have the opportunity to earn up to 150% of their target opportunity for outstanding performance. This is to reinforce a strong link between performance and executive remuneration. This represents a change from previous practice, where STI ‘target’ was the maximum award available. The P&O Committee approves the assessment of performance against objectives and the final STI outcomes for Other Executives. The Board assesses the performance of and determines the STI outcome for the Group CEO and Managing Director. The pool of funds available to reward executives under the STI plan is determined by direct reference to Group financial performance and, where relevant, regional financial performance. Pool funding levels have been set by the Board and correspond to threshold, target and stretch levels of profit achievement. If profit performance is above target, sufficient funds will be available to pay average awards above target. Payments to individual executives are capped at 150% of target and total pool funding is capped at 125% of the target pool. Conversely, if profit performance is below target, average STI awards will be below target. An individual executive’s award will be determined based on their overall performance rating and contribution, relative to other executives. The total STI pool may be either partially or fully allocated to Executives each year. STI deferral Higher maximum STI opportunities have been coupled with a longer deferral period than in previous years to further align the interests of executives and securityholders. 50% of STI awards paid to the Group CEO and Managing Director and Other Executives are deferred into Lend Lease securities. 50% of the deferred portion (i.e. 25% of the total award) vests to recipients one year after payment of the non-deferred portion; the remaining 50% vests after two years. Securities are forfeited by the individual if they resign or are terminated for cause during the vesting period. Distributions are received by executives during the vesting period, subject to the executive continuing in employment. These changes avoid the risks associated with paying STI awards entirely as cash and motivate executives to deliver sustainable performance as they have a substantial interest in Lend Lease securities.

14 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued STI measures a. Group CEO and Managing Director scorecard The CEO’s scorecard is approved annually by the Board to reflect Lend Lease’s key strategic priorities. The scorecard balances both financial and non-financial measures to enable the Board to assess achievement on a holistic basis, including management of risk and capital used to achieve profitability. Financial measures focus on profit after tax (PAT), growth and capital management. Non-financial measures include achievement of strategic and operational excellence objectives as well as the successful implementation of safety and people leadership goals. During the year ended 30 June 2011 the CEO made significant progress across these multi-dimensional areas. Financial performance exceeded targets. The CEO led the acquisition of the Valemus business; drove heightened attention to profit and commercial advantage throughout the business; and oversaw the introduction of a group-wide pay for performance and succession planning process. b. Other Executives scorecard Executive performance is also measured using a balanced scorecard. Examples of the measures used are:

Category Measure Reasons Chosen Financial Growth – secured work in key business areas Recognises the importance of delivering Capital – return on equity or return on capital returns for securityholders and securing future revenue. Profitability – achievement of profit and margin targets People and Employee engagement measured using an Employee engagement, effective leadership, Leadership independently run employee survey. safety and a performance culture are key to Develop and retain top talent through leadership delivering sustainable performance. development and succession planning. Drive a performance culture by differentiating pay based on performance. Demonstrate Lend Lease leadership standards including safety, diversity, behaviour and environment. Operational Improve our service delivery, efficiency and Client satisfaction and cost management are Excellence effectiveness, for example: important drivers of current and future − support transformation cost saving target to business performance. reduce overhead; − improved client feedback scores; and − achieve supply chain and procurement targets. Strategic Individual specific objectives based on key Ensures executives are focussed on initiatives deliverables for role. that deliver future growth and improved business performance.

15 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Long-Term Incentives (LTI) An annual grant of ‘performance securities’ is made to a limited number of executives. Performance securities can be converted to Lend Lease securities if the performance hurdle is achieved over a three-year and four-year period. For performance securities granted during the year, the performance hurdle is Lend Lease’s total securityholder return (TSR) compared to the companies in the S&P ASX 100 Index. The Board intends that LTI awards be settled in Lend Lease securities; however they may be settled in cash or other means at the Board’s discretion. 2010/11 LTI Plan The key features of the 2010/11 LTI Plan are:

Eligibility Eligibility is limited to 12 senior executives who were identified as most able to influence the strategic direction and long-term performance of Lend Lease. Grant date 1 September 2010 Performance hurdle Relative TSR was selected as the performance measure to link LTI awards to the delivery of superior securityholder returns relative to other S&P/ASX 100 companies over the performance period. This method was chosen after consultation with securityholders. Performance period 50% of the 2010/2011 LTI grant is tested at three years. If the hurdle is not fully achieved at this time, those performance securities with a three year performance period will lapse. The remaining 50% of the performance securities are tested after four years. There is no opportunity to re-test any portion of the LTI grant. Peer group The relative TSR peer group consists of the S&P/ASX 100 companies determined at the start of the performance period. Participants only receive value if Lend Lease’s TSR is at or above the 50th percentile of companies in the peer group, reflecting a focus on delivery of superior securityholder returns. The vesting schedule is:

Percentage of performance securities that vest if the Relative TSR percentile ranking relative TSR hurdle is met Below the 50th percentile No vesting At the 50th percentile 50% vesting th Above the 50 percentile but below the Pro-rated vesting on a straight line basis between 75th percentile 50% and 100% At 75th percentile or greater 100% vesting

Termination and forfeiture For ‘good leavers’, a pro-rata award may be paid after termination, subject to the original performance hurdle, unless there are exceptional circumstances (e.g. death or total and permanent disability) where the Board may determine and pay the award at the time of termination. If an executive is terminated for cause or resigns, unvested LTI is forfeited. Unvested LTI grants will be forfeited if an executive enters into a prohibited pre-vesting hedging arrangement in relation to their LTI awards.

16 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Previous LTI plans No LTI grants vested during the year ended 30 June 2011. LTI grants in prior years that are yet to be tested and are yet to vest are described below:

2008/2009 LTI Plan 2009/2010 LTI Plan Eligibility Key executives and other senior management approved by the Board. Award type Performance and Retention. ⅓ Retention, ⅓ relative TSR and ⅓ EPS. Performance. ½ EPS and ½ relative TSR. Performance Vesting of performance securities is subject to relative TSR and EPS performance. securities Retention Vesting of retention securities is subject to the participant’s continuous No retention securities. securities employment with Lend Lease over the performance period. Grant date 1 September 2008 1 September 2009 First vesting 1 September 2011. If the grant does not fully vest at September 2011, the 1 September 2012 (50%) date unvested relative TSR portion of performance securities may be tested at 1 1 September 2013 (50%) March 2012 and 3 September 2012. Any unvested EPS portion of performance No further testing. securities may be tested at September 2012. Relative TSR The relative TSR peer group consists of S&P/ASX 100 Index companies. The vesting schedule for relative TSR is the same as the 2010/2011 grant, refer to page 16. targets Relative TSR Performance is tested three years from the date of grant and subsequently 3½ Half the grant is tested at three years and the remaining half is tested at four years. performance and 4 years from the date of grant if required. If any part of the performance Any part of the grant that is tested and does not meet the performance hurdle will period hurdle is achieved at the relevant testing dates, the corresponding payout will be lapse. There is no opportunity to retest the TSR grant. delivered following the vesting date if employment conditions are satisfied. EPS Targets EPS is calculated on the basis of the following: statutory profit/(loss) after tax EPS is based on Statutory EPS, defined as the statutory profit/(loss) after tax, adjusted for exclusion of treasury securities, unrealised carrying value attributable to members of Lend Lease Corporation Limited, divided by the weighted adjustments (but not excluding unrealised adjustments on the value of inventory average number of ordinary securities (excluding treasury securities). EPS-tested held for sale); write-off of goodwill; movements in the value of investment performance securities will vest subject to performance against targets set by the properties; savings implementation costs; and one-off benefits from the UK Board. pension plan. EPS-tested performance securities will vest subject to The Board set both a minimum and a stretch aggregate EPS target, and a final year performance against compound annual growth rate targets set by the Board. EPS target for the three-year and four-year performance periods. The EPS annual growth target set by the Board for the year ending 30 June 2011 was 12.1%.

17 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Previous LTI plans continued

2008/2009 LTI Plan 2009/2010 LTI Plan

EPS Targets EPS (as defined for LTI purposes) continued Target Actual Aggregate EPS target The aggregate target was set at the start of the EPS for 30 Jun 08 base N/A 87.8c performance period, and actual performance is EPS for 30 Jun 09 80.9c 30.0c measured by the sum of three-year and four-year EPS -% growth from prior year -7.9% -65.8% performance compared to the aggregate EPS target. EPS for 30 June 10 90.7c 68.3c Final year EPS target This is calculated by dividing the aggregate EPS target - % growth from prior year 12.1% 127.7% over the relevant performance period by the number of - two year compound annual growth rate 2.0% -12.0% years in the performance period (i.e. three or four EPS for 30 June 11 101.7 90.3 years) (‘qualifying condition’). - % growth from prior year 12.1% 32.2% - three year compound annual growth rate 5.0% 0.9%

EPS EPS will be assessed over the period 1 July 2008 to 30 June 2011 and (if For vesting to occur, Lend Lease’s actual aggregate EPS must be equal to or greater performance required) over the period 1 July 2008 to 30 June 2012. For vesting to occur, than the aggregate EPS target. Vesting is, however, subject to a qualifying condition. period and Lend Lease’s compound EPS growth rate over the test period must be equal to Vesting will only occur where Lend Lease’s actual EPS in year three (or four) of the vesting the compounded annual target rate over that period. The vesting schedule for performance period is equal to or greater than the respective final year EPS target. EPS is as follows: Subject to meeting the final year EPS target at year three or year four, the table below shows how vesting will occur based on Lend Lease’s actual EPS performance at the Compound EPS growth Payout (% of award to vest) vesting dates. Less than the compound of target rates 0% Percentage of EPS-tested performance Equal to the compound of target rates 50% EPS performance levels securities that will vest Greater than the compound of target Proportion of EPS grant vesting Less than minimum aggregate EPS target 0%

rates but less than 20% more than the increases in a straight line Equal to minimum aggregate EPS target 50% compound of target rates between 50% and 100% Greater than minimum aggregate EPS Pro-rated vesting (on a straight line At least 20% more than the compound 100% target, less than stretch target basis) between 50% and 100% of target rates At or above stretch aggregate EPS target 100% If full payout for the EPS component has not been achieved at 30 June 2011, Participants were advised of the EPS targets at the time the LTI grant was made in the Board will determine a target EPS growth rate for the year ending 30 June September 2009. The Board has committed to disclosing the EPS targets 2012. retrospectively in the Remuneration Report following the end of the relevant

The EPS target (if required) set by the Board for the year ending 30 June 2012 performance periods (being 30 June 2012 and 30 June 2013.)

will be disclosed in the 2012 Remuneration Report. In setting the minimum and stretch aggregate EPS targets, the Board has taken into account the forecast business plan performance as well as market expectations to determine robust but achievable performance targets for the 50% and 100% vesting thresholds of the EPS component of the LTI. 18 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Previous LTI plans continued

2008/2009 LTI Plan 2009/2010 LTI Plan

Termination The retention securities component is forfeited if the individual is not in For ‘good leavers’, a pro-rata award may be paid after termination and be subject to and forfeiture employment at the first vesting date (including for ‘good leaver’ reasons). the original performance conditions, unless there are exceptional circumstances (e.g. death or total and permanent disability) where the Board may determine and pay the For ‘good leavers’, the individual may, subject to Board discretion and in award at the time of termination. specified circumstances, receive a pro rata award for performance securities tested against relative TSR and EPS performance at the time of termination. Where an employee is terminated for cause or resigns, unvested LTI is forfeited. Where an employee is terminated for cause or resigns, unvested LTI is forfeited. Unvested LTI grants will be forfeited if an executive enters into a prohibited pre- Unvested LTI grants will be forfeited if an executive enters into a prohibited pre- vesting hedging arrangement in relation to their LTI awards. vesting hedging arrangement in relation to their LTI awards.

19 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Other incentive plans

Where appropriate, the Board will provide targeted incentives for specific business areas or individuals. a. Performance awards – Other Executives Mr McNamara CEO Americas, participates in an additional incentive plan that operates for the years ending 30 June 2011 and 30 June 2012 only, related to the performance of the Americas and is in addition to the STI plan. During the year an opportunity to earn up to A$650,000 in deferred securities was granted. This plan was created in order to support the significant turnaround required in the Americas business. The plan requires achievement of financial and non- financial measures that are in addition to those set under the STI plan. The plan stipulates that this award is deferred so that 50% is provided after two years and the remaining 50% after three years subject to continuing in employment. It is intended that this award be settled in Lend Lease securities. Based on performance under the plan A$585,000 will be granted in deferred securities on 1 September 2011. Mr Ooi, CEO Asia, participated in an additional incentive plan that concluded during the year ended 30 June 2011. Performance targets related to the performance of the Asian Retail Investment Fund were not met and no award was paid. Mr Gupta, Group Head of Investment Management, participates in an additional incentive plan that operates for the years ending 30 June 2011 and 30 June 2012 only. Mr Gupta may earn up to A$500,000 each year based upon achievement of key performance indicators relating to growth in global funds under management, incremental profits from external equity and gross profit margin. This is reflective of market practice with regard to investment management incentive plans and recognises the relative contribution of Mr Gupta to the business. For the year ended 30 June 2011 Mr Gupta received A$250,000 under this plan. b. Project Management and Construction incentive plan A performance related incentive plan has been implemented for 12 critical employees in the Australian Project Management and Construction business. In total awards made under the plan have a maximum value of A$3.3 million, earned over three years which are subject to achievement of profit targets. The first payment under this plan may be earned in the year ending 30 June 2012. The remuneration of these employees is not disclosed in this report. c. Infrastructure incentive plans During the year, Lend Lease acquired Valemus Australia (Valemus) the parent company of Abigroup, Baulderstone and Conneq which together now form the Group’s infrastructure business in Australia (infrastructure). The Board has approved a profit share plan for 55 infrastructure employees. Payments under the plan are subject to profit before tax targets and continuing employment. Payments to individual employees will be made over periods ranging from 18 months to 4½ years depending on the employee’s role and level in the Group. If all targets are met, the total value paid to all participants over the relevant periods will be approximately A$12 million. STI deferral periods in line with the Lend Lease Executive Reward Strategy are being implemented for the most senior infrastructure employees. A number of infrastructure employees have employment contracts that provide for a notice period that is longer than 12 months or a payment in lieu of notice that is greater than 12 months of fixed pay. These contract terms were put in place by Valemus prior to the acquisition by Lend Lease. Lend Lease is reviewing these contracts on a case by case basis to monitor compliance with the new Corporations Act limits on termination benefits. d. Retention awards When the Board believes an executive is an outstanding performer and the Group and securityholders would gain by encouraging them to remain with the Group, a retention award may be made. No new retention awards were granted or paid in the current year to the Group CEO and Managing Director. Mr Hutton was awarded a special cash retention award in recognition of his contribution to the Barangaroo development project. During the year a payment of A$60,000 was paid under this award with a further payment of A$80,000 due in June 2012 subject to continuing in employment. The Board approved retention payments for the Managing Director of Infrastructure in Australia that total less than A$1.0 million spread over three years to offset an agreed reduction in fixed remuneration. Details of the retention awards which have previously been granted to the Group CEO and Managing Director and Other Executives and which have not yet vested are shown in Section h.

20 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued e. Reward Strategy and Practice – Audited continued Securities Trading Policy The Lend Lease Securities Trading Policy applies to all employees of the Lend Lease group of companies. In accordance with the policy, directors and executives may only deal in Lend Lease securities during designated periods. Directors and executives must not enter into transactions or arrangements that operate to limit the economic risk of unvested entitlements to Lend Lease securities. No director or executive may enter into a margin loan arrangement in respect of Lend Lease securities. f. How Rewards are Influenced by Performance - Audited Key financial indicators: Group performance over the past five years

The table below outlines some key indicators of Group performance over the past five years. June 2011 June 2010 June 2009 June 2008 June 2007 Statutory profit/(loss) after tax A$m 492.8 345.6 (653.6) 265.4 497.5 Operating profit after tax A$m 485.3 323.6 307.5 447.1 413.7 EPS on operating profit after tax1 cents 90.3 68.3 77.5 120.9 120.5 Total distributions2 A$m 198.7 160.6 186.7 308.9 308.5 (Decrease)/increase in closing price3 A$ 1.64 0.32 (2.54) (8.99) 4.55 1 EPS (Earnings per security) is calculated using the weighted average number of securities on issue excluding treasury securities. 2 The June 2011 distribution of A$85.6 million was declared subsequent to the reporting date. 3 Represents the movement in the security price over the year calculated using the closing security price at 30 June.

Linking rewards and performance a. Fixed remuneration Fixed remuneration is primarily set with reference to the individual’s role, responsibilities, performance and the remuneration paid to comparable roles in the external market. It is not generally linked with annual Group performance.

21 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued f. How Rewards are Influenced by Performance – Audited continued Linking rewards and performance continued b. Short-term incentive (STI) STIs are awarded to individuals based on an assessment of the executive’s overall performance and the profitability of the Group and Region where relevant. The Board determines the aggregate pool available to fund STIs based on the Group’s profit after tax. On average, STI awards for the year ended 30 June 2011 are above target. This outcome reflects the Group’s profit after tax result, that was significantly above target performance. In line with performance for the year ended 30 June 2011, STI awards are presented in the table below:

Total target % of STI opportunity Value of Value of STI % of deferred STI deferred STI

opportunity Cash Deferred % of Target Maximum STI Total A$ STI STI awarded to vest in to vest in

A$000s component component STI Paid Paid awarded as cash Sept 20121 Sept 20131 Group CEO and Managing Director Stephen McCann 3,083 50 50 125 83 3,854 1,927 964 964 Other Executives Scott Charlton 1,155 50 50 135 90 1,560 780 390 390 Tarun Gupta 660 50 50 140 93 924 462 231 231 David Hutton 730 50 50 105 70 767 384 192 192 Daniel Labbad 644 50 50 150 100 967 484 242 242 Rod Leaver 875 50 50 110 73 963 482 241 241 Anthony Lombardo 680 50 50 150 100 1,020 510 255 255 Robert McNamara 650 50 50 135 90 878 439 220 220 Mark Menhinnitt 760 50 50 120 80 912 456 228 228 Eng-Peng Ooi2 406 100 – 75 50 304 304 – – Brad Soller 800 50 50 125 83 1,000 500 250 250 1 Deferred STI is delivered as Lend Lease securities which are scheduled to be granted in September 2011. 2 Mr Ooi’s STI will be settled entirely as cash. This was agreed as part of Mr Ooi’s cessation arrangements.

22 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued f. How Rewards are Influenced by Performance – Audited continued Linking rewards and performance continued c. Long-term incentive (LTI) No long term incentive awards vested during the year. Lend Lease’s relative TSR performance over the performance period for each outstanding LTI grant is shown below. Relative TSR performance for Sept 2008 Grant

Comparative TSR performance from 1 September 2008 to 30 June 2011

40% 30% 20% 10% 0% Lend Lease TSR -10% -20% ASX100 TSR -30% -40% -50% Total Shareholder Returns (TSR) Total Shareholder Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Date

Relative TSR performance for Sept 2009 Grant

Comparative TSR performance from 1 September 2009 to 30 June 2011

40% 30% 20% 10% 0% Lend Lease TSR -10% -20% ASX100 TSR -30% -40% -50%

Total Shareholder Returns (TSR) Total Shareholder Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11

Date

Relative TSR performance for Sept 2010 Grant

Comparative TSR performance from 1 September 2010 to 30 June 2011

40% 30% 20% 10% 0% Lend Lease TSR -10% -20% ASX100 TSR -30% -40% -50%

Total Shareholder Returns (TSR) Total Shareholder Sep 10 Dec 10 Mar 11 Jun 11 Date

23 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued f. How Rewards are Influenced by Performance – Audited continued Linking rewards and performance continued c. Long-term incentive (LTI) continued The historical vesting of LTI is as follows:

Grant date Vesting date Performance hurdle(s) Performance hurdle achievement July 2007 30 June 2010 EPS, Relative TSR Not met g. Executive Contracts - Audited Group CEO and Managing Director’s contract – Stephen McCann

Contract duration No fixed term. Appointment as Managing Director not to exceed five years, effective 4 March 2009. Benefits Total package includes fixed remuneration and superannuation. Additional benefits include vehicle lease cost, parking space at Lend Lease headquarters and life insurance to the value of three times fixed remuneration. Variable remuneration eligibility Eligible for STI and LTI plan at Board discretion. Non-compete period 12 months Non-solicitation period 12 months Notice by Lend Lease 12 months Notice by CEO 6 months Treatment on termination Payment in lieu of notice: Where the CEO is not employed for the full period of notice, a payment in lieu of notice may be made. The payment in lieu of notice includes pro rata fixed remuneration and the cash value of statutory entitlements and benefits, and pro rata STI based on the level of performance achievement in the previous year. Treatment of incentives: The CEO may receive a pro rata STI award for the latest financial year based on assessment of his performance by the Board. LTIs will be treated according to ordinary award terms, and for the most recent LTI award before termination, the pro-rata period is increased by 12 months. Other The CEO has previously been granted retention awards. A number of these have not yet vested. They are described in Section h.

24 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued g. Executive Contracts – Audited continued Executives are typically employed on contracts that have no fixed term. Benefits may include participation in the Employee Share Acquisition Plan, health/life insurance, car allowances, motor vehicle leases and salary continuance. Lend Lease ensures that any termination benefits provided under the contract of any newly employed executive falls within the limits set by the Corporations Act so that the level of termination benefits does not require securityholder approval. There are some existing employment contracts within the Group that provide for a notice period that is longer than 12 months or a payment in lieu of notice that is greater than 12 months of fixed pay These contracts were put in place prior to the changes to the Corporations Act in 2009 which changed the limit for termination benefits and complied with the limits in place at the time the contract was entered into. Lend Lease is reviewing these contracts on a case by case basis to monitor compliance with the new Corporations Act limits on termination benefits.

Executive Notice by Lend Lease Notice by executive Treatment on termination for notice Scott Charlton 6 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration, superannuation and accrued leave. Tarun Gupta 6 months 6 months Payment may be made in lieu of notice. David Hutton 12 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration, superannuation plus projected STI (if eligible in that year) of 60% of the target cash opportunity. Daniel Labbad 12 months 6 months Payment may be made in lieu of notice. Company will provide repatriation support to Australia if not a resignation. Rod Leaver 6 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration and accrued but untaken leave. Anthony Lombardo 12 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration, superannuation plus projected STI (if eligible in that year) of 60% of the target cash opportunity. Robert McNamara 3 months 3 months Payment may be made in lieu of notice. Notice payment is based on base salary and other minimum benefits as required by applicable US legislation. Mark Menhinnitt 12 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration, superannuation plus projected STI (if eligible in that year) of 60% of the target cash opportunity. Eng-Peng Ooi 6 months 6 months Payment may be made in lieu of notice. Company will provide repatriation support to Australia if not a resignation. Brad Soller 12 months 6 months Payment may be made in lieu of notice. Notice payment is based on fixed remuneration, superannuation plus projected STI (if eligible in that year) of 60% of the target cash opportunity.

Executives are also eligible for participation in the STI and LTI plans subject to Board discretion. Termination clauses are specified in each contract describing treatment on termination based on the reason for termination (e.g. resignation, with notice, due to illness, or immediate termination for cause).

25 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures - Audited

Post- employment Short-term benefits benefits Security-based payment Non-monetary LTI equity- STI equity- Other long- A$000s Year Cash salary1 Cash STI benefits2 Superannuation3 settled4 settled Retention5 term benefits6 Total Executive Director Stephen McCann 2011 1,786 1,927 224 32 821 648 655 27 6,120 2010 1,518 1,368 159 27 642 546 1,031 22 5,313 Other Executives Scott Charlton 2011 1,199 780 66 20 128 82 18 2,293 (Part year only) 2010 335 191 3 6 23 5 563 Tarun Gupta 2011 690 712 34 77 124 124 22 11 1,794 20109 – David Hutton 2011 784 384 49 81 203 258 44 11 1,814 2010 594 258 10 67 168 189 44 8 1,338 Daniel Labbad 2011 820 483 165 61 199 128 45 1,901 20109 – Rod Leaver 2011 1,043 481 120 17 61 259 1,981 2010 829 481 6 14 562 187 11 2,090 Anthony Lombardo 2011 727 510 59 17 152 160 21 11 1,657 2010 632 320 3 16 115 137 21 8 1,252 Robert McNamara 2011 713 439 34 273 35 1,494 20109 – Mark Menhinnitt7 2011 778 456 86 230 152 51 12 1,765 2010 697 354 77 208 135 51 10 1,532 Eng-Peng Ooi8 2011 510 304 29 52 86 205 11 1,197 20109 – Brad Soller 2011 847 500 14 19 193 178 26 13 1,790 2010 672 414 32 22 151 130 26 10 1,457

Footnotes to follow on page 27.

26 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued

Post- employment Short-term benefits benefits Security-based payment Non-monetary LTI equity- STI equity- Other long- A$000s Year Cash salary1 Cash STI benefits2 Superannuation3 settled4 settled Retention5 term benefits6 Total Previously disclosed executives10 Michael Bellaman11 2010 556 139 54 8 50 112 473 1,392 Murray Coleman 2010 683 345 30 72 159 117 530 8 1,944 William Hara 2010 563 267 14 160 175 39 7 1,225 Neil Martin 2010 399 134 183 136 92 78 19 6 1,047 1 Cash Salary includes the payment of cash allowances such as motor vehicle, superannuation and housing allowance. Rod Leaver does not include payment of accrued annual leave A$40,054 on transfer to the Singapore employing entity. David Hutton includes a cash retention payment of A$60,000. 2 Non-monetary benefits include car parking, relocation and expatriate benefits (such as health insurance, shipping of goods and tax return preparation), motor vehicle costs and annual leave. 3 Superannuation for defined benefit members in Australia (Tarun Gupta, David Hutton, Mark Menhinnitt, Eng-Peng Ooi) reflects the cost of contributions based on the long-term contribution rate applied to the notional salary in respect of each executive. Superannuation includes the value of life insurance premiums (Scott Charlton A$4,381, Tarun Gupta A$2,148, David Hutton A$3,758, Rod Leaver A$2,148, Anthony Lombardo A$2,148, Stephen McCann A$9,634, Mark Menhinnitt A$2,148, Eng-Peng Ooi A$2,020, Brad Soller A$3,532). 4 Fair value expense of LTI awards that are equity settled. 5 These amounts represent the amortisation of previous retention awards made including the retention component of the September 2008 LTI award. 6 Other long term benefits represent the accrual of statutory employee entitlements i.e. long service leave. 7 Mr Menhinnitt is included for the full year as he is in the top five highest paid for the Company and a Key Management Personnel (KMP) from 1 April 2011. 8 Mr Ooi ceased to be Key Management Personnel effective 1 April. Disclosures represent part-year remuneration from 1 July 2010 to 31 March 2011 while he was a KMP. 9 Individuals who were not Key Management Personnel or the five highest paid in the Group or the five highest paid in the Company during the year ended 30 June 2010 have no remuneration related to the year ended 30 June 2010 disclosed in this table. 10 Previously disclosed executives are no longer required to be disclosed as they are neither Key Management Personnel nor in the top five highest paid Executives in the Group or Company during the year ended 30 June 2011. 11 Michael Bellaman agreed to his employment terminating 20 August 2010 and received a termination payment of A$1,268,328 in relation to contractual entitlements.

27 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Remuneration components as a proportion of reported total remuneration1

Performance-based

Fixed STI2 LTI

Executive Director Stephen McCann 30% 58% 12% Other Executives Scott Charlton 43% 53% 4% Tarun Gupta 43% 50% 7% David Hutton 48% 41% 11% Daniel Labbad 47% 44% 9% Rod Leaver 53% 44% 3% Anthony Lombardo 40% 52% 8% Robert McNamara 39% 46% 15% Mark Menhinnitt 43% 45% 12% Eng-Peng Ooi 60% 31% 9% Brad Soller 43% 48% 9% 1 Excludes retention awards. 2 STI includes the cash amount and the deferred amount accrued for performance for the year ended 30 June 2011.

28 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Equity-based payments a. Outstanding LTI awards No LTI awards outlined below vested during the year ended 30 June 2011. Expense for Fair value per equity Total fair value at the year ended 2 Plan instrument grant date 30 June 2011 1 Name (for the year ended) Grant date Vesting date Number granted A$ A$ A$ Executive Director Stephen McCann June 2009 LTI – A3 Sept 2008 August 2012 120,235 6.35 763,566 190,892 June 2009 LTI – B3 Sept 2008 August 2011 60,135 7.01 421,464 140,488 June 2010 LTI (50%)4 Sept 2009 August 2012 124,535 6.08 757,173 232,880 June 2010 LTI (50%)4 Sept 2009 August 2013 124,535 6.31 785,816 182,444 June 2011 LTI (50%)5 Sept 2010 Sept 2013 87,680 4.92 431,386 119,830 June 2011 LTI (50%)5 Sept 2010 Sept 2014 87,680 5.20 455,936 94,987 Total 961,521 Other Executives Scott Charlton June 2010 LTI (50%)4 Sept 2009 August 2012 16,220 6.08 98,615 30,330 June 2010 LTI (50%)4 Sept 2009 August 2013 16,220 6.31 102,345 23,762 June 2011 LTI (50%)5 Sept 2010 Sept 2013 30,222 4.92 148,692 41,304 June 2011 LTI (50%)5 Sept 2010 Sept 2014 30,222 5.20 157,154 32,741 Total 128,137 Tarun Gupta June 2009 LTI – A3 Sept 2008 August 2012 18,947 6.35 120,313 30,082 June 2009 LTI – B3 Sept 2008 August 2011 9,477 7.01 66,434 22,139 June 2010 LTI (50%)4 Sept 2009 August 2012 14,594 6.08 88,732 27,291 June 2010 LTI (50%)4 Sept 2009 August 2013 14,594 6.31 92,088 21,380 June 2011 LTI (50%)5 Sept 2010 Sept 2013 18,489 4.92 90,966 25,268 June 2011 LTI (50%)5 Sept 2010 Sept 2014 18,489 5.20 96,143 20,030 Total 146,190

Footnotes to follow on page 32.

29 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Equity-based payments continued a. Outstanding LTI awards continued Expense for Fair value per equity Total fair value at the year ended 2 Plan instrument grant date 30 June 2011 1 Name (for the year ended) Grant date Vesting date Number granted A$ A$ A$ Other Executives continued David Hutton June 2009 LTI – A3 Sept 2008 August 2012 37,538 6.35 238,363 59,591 June 2009 LTI – B3 Sept 2008 August 2011 18,769 7.01 131,569 43,856 June 2010 LTI (50%)4 Sept 2009 August 2012 28,910 6.08 175,773 54,062 June 2010 LTI (50%)4 Sept 2009 August 2013 28,910 6.31 182,422 42,353 June 2011 LTI (50%)5 Sept 2010 Sept 2013 19,200 4.92 94,464 26,240 June 2011 LTI (50%)5 Sept 2010 Sept 2014 19,200 5.20 99,840 20,800 Total 246,902 Daniel Labbad June 2009 LTI – A3 Sept 2008 August 2012 38,324 6.35 243,357 60,845 June 2009 LTI – B3 Sept 2008 August 2011 19,168 7.01 134,368 44,779 June 2010 LTI (50%)4 Sept 2009 August 2012 27,339 6.08 166,221 51,124 June 2010 LTI (50%)4 Sept 2009 August 2013 27,339 6.31 172,509 40,052 June 2011 LTI (50%)5 Sept 2010 Sept 2013 19,200 4.92 94,464 26,240 June 2011 LTI (50%)5 Sept 2010 Sept 2014 19,200 5.20 99,840 20,800 Total 243,840 Rod Leaver6 June 2011 LTI (50%) Sept 2010 Sept 2013 24,889 4.92 122,454 34,015 June 2011 LTI (50%) Sept 2010 Sept 2014 24,889 5.20 129,423 26,963 Total 60,978 Anthony Lombardo June 2009 LTI – A3 Sept 2008 August 2012 18,045 6.35 114,598 28,649 June 2009 LTI – B3 Sept 2008 August 2011 9,025 7.01 63,254 21,085 June 2010 LTI (50%)4 Sept 2009 August 2012 23,351 6.08 141,974 43,666 June 2010 LTI (50%)4 Sept 2009 August 2013 23,351 6.31 147,345 34,210 June 2011 LTI (50%)5 Sept 2010 Sept 2013 18,489 4.92 90,966 25,268 June 2011 LTI (50%)5 Sept 2010 Sept 2014 18,489 5.20 96,143 20,030 Total 172,908 Footnotes to follow on page 32. 30 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Equity-based payments continued a. Outstanding LTI awards continued Expense for Fair value per equity Total fair value at the year ended 2 Plan instrument grant date 30 June 2011 1 Name (for the year ended) Grant date Vesting date Number granted A$ A$ A$ Other Executives continued Robert McNamara June 2010 LTI (50%)4 Sept 2009 August 2012 43,285 6.08 263,173 80,943 June 2010 LTI (50%)4 Sept 2009 August 2013 43,285 6.31 273,128 63,412 June 2011 LTI (50%)5 Sept 2010 Sept 2013 52,533 4.92 258,462 71,795 June 2011 LTI (50%)5 Sept 2010 Sept 2014 52,533 5.20 273,171 56,910 Total 273,060 Mark Menhinnitt June 2009 LTI – A3 Sept 2008 August 2012 43,308 6.35 275,034 68,759 June 2009 LTI – B3 Sept 2008 August 2011 21,661 7.01 151,810 50,603 June 2010 LTI (50%)4 Sept 2009 August 2012 33,358 6.08 202,817 62,379 June 2010 LTI (50%)4 Sept 2009 August 2013 33,358 6.31 210,489 48,870 June 2011 LTI (50%)5 Sept 2010 Sept 2013 20,267 4.92 99,714 27,698 June 2011 LTI (50%)5 Sept 2010 Sept 2014 20,267 5.20 105,388 21,955 Total 280,264 Eng-Peng Ooi June 2009 LTI – A3 Sept 2008 August 2012 9,456 6.35 60,045 15,013 June 2009 LTI – B3 Sept 2008 August 2011 4,730 7.01 33,157 11,049 June 2010 LTI (50%)4 Sept 2009 August 2012 10,396 6.08 63,208 19,441 June 2010 LTI (50%)4 Sept 2009 August 2013 10,396 6.31 65,599 15,230 June 2011 LTI (50%)5 Sept 2010 Sept 2013 14,933 4.92 73,470 20,409 June 2011 LTI (50%)5 Sept 2010 Sept 2014 14,933 5.20 77,652 16,178 Total 97,320 Brad Soller June 2009 LTI – A3 Sept 2008 August 2012 22,376 6.35 142,101 35,525 June 2009 LTI – B3 Sept 2008 August 2011 11,191 7.01 78,435 26,145 June 2010 LTI (50%)4 Sept 2009 August 2012 31,546 6.08 191,800 58,991 June 2010 LTI (50%)4 Sept 2009 August 2013 31,546 6.31 199,055 46,215 June 2011 LTI (50%)5 Sept 2010 Sept 2013 21,333 4.92 104,958 29,156 June 2011 LTI (50%)5 Sept 2010 Sept 2014 21,333 5.20 110,932 23,111 Total 219,143 Footnotes to follow on page 32. 31 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Equity-based payments continued a. Outstanding LTI awards continued

1 Early vesting of the award may be available in certain circumstances. The award is forfeited on resignation, but in other cases of termination may be awarded on a pro-rata basis. 2 The fair value at grant date represents an actuarial valuation of the award using assumptions underlying the Black-Scholes methodology to produce a Monte-Carlo simulation model in accordance with Australian Accounting Standards. 3 The September 2008 grant had three components, with one-third of the grant being tested against EPS and one-third against TSR (Plan for the year ended June 2009 LTI – A), and the remainder vesting based on achievement of service conditions (Plan for the year ended June 2009 LTI – B). For components tested equally against TSR and EPS (Plan for the year ended June 2009 LTI – A) the weighted average fair value is disclosed. 4 The September 2009 grant is split into two equal tranches that vest independently after three and four years subject to meeting the performance hurdles described in Section e. 5 The September 2010 grant is split into two equal tranches that vest independently after three and four years subject to meeting the performance hurdles described in Section e. 6 As a consequence of Mr Leaver’s appointment to the role of Regional CEO, Australia grants made under previous business unit specific LTI plans have been replaced by participation in the Group LTI plan and will be subject to the same terms and performance hurdles.

32 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued h. Statutory Executive Remuneration Disclosures – Audited continued Equity-based payments continued b. Outstanding retention awards Expense for Fair value per Total fair value at the year ended

equity instrument grant date 30 June 2011 Name Grant date Vesting date1 Number granted A$ A$ A$ S McCann Aug 2007 June 2012 141,367 17.68 2,500,000 514,374

1 Mr McCann must be employed at the vesting date for vesting to occur. In certain circumstances (e.g. termination without cause), pro-rata early vesting may be available. i. Non-Executive Director Remuneration - Audited To maintain their independence and impartiality, Non Executive Directors’ rewards do not have any at-risk components. They may be affected by company performance with regard to personal security holdings and post-employment benefits delivered as Lend Lease securities. On appointment to the Board, all non-executive directors enter into a service agreement with the company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of director. The total fees paid to the Non-Executive Directors are kept within the total aggregate fee pool of A$2,500,000 as approved by securityholders at the 2008 Annual General Meeting.

Board and Committee fees There was no increase to Board or Board Committee fees during the year. Board and Board Committee fees are set with reference to advice from external advisers and market data, with regard to factors such as the responsibilities and risks associated with the role in question. Chair fee Member fee A$ A$ Board 640,000 160,000 Nomination Committee 36,000 Nil Personnel and Organisation Committee 36,000 20,000 Risk Management and Audit Committee 44,000 36,000 Sustainability Committee 36,000 20,000 The fees paid to compensate directors for time spent travelling to overseas meetings are shown below. All business-related expenses (e.g. travel) are also reimbursed. Travel less than 4 hours Travel between 4 and 10 hours Travel over 10 hours A$ A$ A$ Fee (each way) – 2,800 6,000

33 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

3. Remuneration Report continued i. Non-Executive Director Remuneration – Audited continued Statutory non-executive director remuneration disclosures

Post- Share- employment based Short-term benefits Payment Committee chairman Committee Travel Other Other A$000s Year Base fees fees fees fees benefits Superannuation equity1 Total David Crawford 2011 640 36 15 691 2010 640 35 14 118 807 Phillip Colebatch 2011 160 36 36 60 15 307 2010 160 36 36 66 14 44 356 Gordon Edington 2011 160 56 60 15 291 2010 160 56 78 14 41 349 Peter Goldmark 2011 160 36 20 66 15 297 2010 160 36 20 78 14 41 349 Julie Hill 2011 160 36 20 97 15 328 2010 160 36 20 83 14 41 354 David Ryan 2011 160 44 20 36 15 275 2010 160 44 20 35 14 43 316 Mark Selway2 2010 99 25 36 9 40 209 1 Other equity refers to the amount accrued under the Non Executive Directors’ Retirement Benefit Plan. This amount is not accessible until the director retires. The plan was discontinued from 1 January 2010. Amounts shown are for 12 months to 31 December 2009. 2 Mark Selway retired as a Director on 10 February 2010.

Post-employment benefits

During the year ended 30 June 2010 the Non-Executive Directors resolved to discontinue the further award of retirement securities. Previously, Non-Executive Directors were entitled to an annual accrual of Lend Lease securities to the value of 0.2 times their Director fee (Board and Board Committee fees only). The value of retirement securities will fluctuate in line with the Lend Lease security price and securities are accessible only on retirement (unless securities need to be sold to meet a tax liability in respect of those securities). Two Non-Executive Directors appointed before 1 January 2001 have also accrued benefits under the previous Retirement Benefit Plan: − Gordon Edington: A$164,640 (30 June 2010: A$153,640); and − Peter Goldmark: A$167,680 (30 June 2010: A$156,960).

34 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

4. Other a. Security Options No security options were issued during the year by the Company or any of its controlled entities, and there are no such options on issue. b. Indemnification and Insurance of Directors and Officers Rule 12 of the Company’s Constitution provides for indemnification in favour of each of the Directors named on pages 1 to 3 of this Report; the Company Secretary, Mr W Hara; and officers of the Company or of wholly owned subsidiaries or related entities of the Company (‘Officers’) to the extent permitted by the Corporations Act 2001. Rule 12 does not indemnify a Director, Company Secretary or Officer for any liability involving a lack of good faith. In conformity with Rule 12 of the Company’s Constitution, the Company has entered into Deeds of Indemnity, Insurance and Access with each of the Directors named on pages 1 to 3 of this Report. The indemnities operate to the full extent permitted by law and are not subject to a monetary limit. The Company is not aware of any liability having arisen, and no claims have been made, during or since the financial year under the Deeds of Indemnity, Insurance and Access. For related entities, the indemnification is provided under Rule 12 of the Company’s Constitution unless the Directors determine otherwise. For unrelated entities in which the Group has an interest, deeds of indemnity may be entered into between Lend Lease Corporation Limited and the Director or Officer. Since the date of the last report, the Company has not entered into any separate deeds of indemnity with a Director or officer of an unrelated entity. No indemnity has been granted to an auditor of the Company in their capacity as auditor of the Company. In accordance with the Corporations Act 2001, Rule 12 of the Constitution also permits the Company to purchase and maintain insurance or pay or agree to pay a premium for insurance for Officers against any liability incurred as an Officer of the Company or of a related body corporate. This may include a liability for reasonable costs and expenses incurred in defending proceedings, whether civil or criminal, and whatever their outcome. Due to confidentiality obligations and undertakings of the policy, no further details in respect of the premium or policy can be disclosed. c. Non Audit Services During the year KPMG, the Company’s auditor, performed certain other services in addition to its statutory duties. The Board has considered the other services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Risk Management and Audit Committee, is satisfied that the provision of those services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:  All other services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the Risk Management and Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and  The other services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. A copy of the Lead Auditors’ Independence Declaration, as required under Section 307C of the Corporations Act 2001, is included at the end of this Report.

35 Annual Consolidated Financial Report 2011 Lend Lease Group

Directors’ Report continued

4. Other continued c. Non Audit Services continued Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and other services provided during the year are set out below. Consolidated June 2011 June 2010 A$000s A$000s

Audit and Other Assurance Services Audit services 7,286 7,122 Other assurance services 2,105 Total audit and other assurance services 9,391 7,122

Other Services International assignees tax services 38 Other 78 Total other services – 116 Total audit and other services 9,391 7,238 d. Rounding Off Lend Lease Corporation Limited is a company of the kind referred to in the Australian Securities and Investments Commission Class Order 98/100 dated 10 July 1998 and, in accordance with that Class Order, amounts in the Consolidated Financial Statements and this Report have been rounded off to the nearest tenth of a million dollars or, where the amount is A$50,000 or less, zero, unless specifically stated to be otherwise. This Report is made in accordance with a resolution of the Board of directors and is signed for and on behalf of the Directors.

D A Crawford, AO S B McCann Chairman Managing Director

Sydney, 26 August 2011

36